Parity After A Pullback

USD The dollar weakened slightly during the Asia session, thanks largely to a surprise policy rate hike from the RBA. EURUSD traded 1.3874-1.3937, USDJPY 80.47-80.76. AUDUSD reached 0.9995, and looks poised for a second run to parity. However, Asian equities failed to make significant headway after US equities closed flat, suggesting investors are largely unwilling to put on fresh risk-seeking positions ahead of this week's events. Even though investors are mostly focused on the FOMC and labour data later in the week, US manufacturing data lent some support to our economists' forecast that real growth should pick up to +2.5% in Q4 vs. +2% in Q3, and that the FOMC announces only "QE2-lite" on Wednesday. The manufacturing ISM index jumped above expectations to 56.9 in October from 54.4 in ...

(Reuters) - The Australian dollar leapt after Australia's central bank surprised markets with a rate hike on Tuesday, leading the U.S. dollar to give back gains in ranges that tightened ahead of the Federal Reserve's policy meeting. The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 4.75 percent as a pre-emptive strike against inflation, sending the Aussie dollar up 1 percent on the day to re-test parity with the U.S. dollar. The Aussie is expected to struggle around $1.0004, a peak in October which was its highest since its 1983 float. With uncertainty before Wednesday's Fed decision, it might not make much headway near term, but analysts expect the RBA to increase rates again next year, keeping the Aussie buoyant. "Ahead of the (Fed) decision we' ...

During this morning’s Asian session, the RBNZ held rates at 3.00% as was generally expected. The accompanying statement was slightly dovish but not enough to really move NZD. The Central Bank seems to feel comfortable with the current level stating "while it is appropriate to keep the OCR on hold today, it remains likely that further removal of monetary policy support will be required at some stage." The AUDNZD’s recent pullback looks to have run into a horizontal support and without a surprise interest rate story, watch for a bounce off the 1.3000 level. In Japan, the BoJ outlined further easing measures stating it would purchase lower-rated corporate bonds than it announced in the compensative package release in September. Regarding FX intervention, the BoJ sounded unhurried to move ...

Commentary of the EUR/USD parity : The parity continues its bullish rallye above its bullish slant towards the resistance at 1.40. The price made a pullback on 1.38 and on 1.39 (after the breakout of this level - new buy signal). All indicators are bullish. We maintain to trade only long positions as far as 1.39 is support. THe breakout of 1.40 will give a new buy signal towards 1.42. See the previous analysis of the EUR/USD parity of October 6th, 2010

The US dollar was weaker again as high yielding currencies performed well. The euro was up sharply versus the dollar and global bourses were higher following yesterday's strong trading session in the Dow. Economic News USD - Dollar Continues to Struggle The slide in the value of the dollar continued today following weaker than expected ADP Non-Farm Employment change. The report showed job losses of -39K. Economists had expected the report to come in at a positive 23K. The payrolls company said the slide in private sector jobs confirms a pause in the economic recovery already evident in other data. Employment fell in all major sectors. Dollar weakness was prevalent with sharp losses occurring versus the euro. The EUR/USD was trading higher at 1.3920, up from an opening day price of 1. ...

Commentary of the GBP/USD parity : After a pullback on the major support at 1.5714 (level advised to enter long), the parity finaly took up its bullish movement and 1.58 seems now to give support. Currently, the parity is testing the last highest and the breakout of the resistance at 1.5854 will give a new buy signal. We maintain to trade only long positions as far as 1.58 is support. In case of breakout, we will stay neutral (a correction will be then possible). See the previous analysis of the GBP/USD parity of September 28th, 2010

Commentary of the USD/CHF parity : Our last commentary is unchanged : 'The parity is currently testing a pullback on 0.9861 after the test of the support at 0.98. The breakout of this level will give a new sell signal. We maintain to trade only short positions as far as 0.99 is resistance. If this level is broken, we will stay neutral.' See the previous analysis of the USD/CHF parity of September 27th, 2010

Commentary of the USD/CHF parity : The parity is currently testing a pullback on 0.9861 after the test of the support at 0.98. The breakout of this level will give a new sell signal. We maintain to trade only short positions as far as 0.99 is resistance. If this level is broken, we will stay neutral. See the previous analysis of the USD/CHF parity of September 24th, 2010

Commentary of the EUR/JPY parity : The parity is currently testing a pullback on 112 after a highest at 113. Indicators are globaly bullish. We maintain to trade only long positions as far as 111.50 is support. The breakout of 113 will give a new buy signal. See the previous analysis of the EUR/JPY parity of Septembre 17th, 2010